Employment Law – Background
The following is a recent example of where a new employer was stung for the wrongs a new employee committed against their former employer …
Employment Law – The Case
In essence:
- Lifeplan and Foresters were competitors in the business of funds management and the provision of investment products, principally for the purpose of funeral plans
- whilst employed by Lifeplan, a manager emailed confidential Lifeplan documents to his personal email address and used these documents to prepare a business plan which he then presented to Foresters with the assistance of another manager
- at the same time, both managers solicited the business of several funeral companies and service providers in order to secure business for Foresters and themselves
- the managers used Lifeplan contracts, brochures and other marketing materials to prepare similar documents for themselves, and utilised Lifeplan’s printing company to generate this material
- Lifeplan commenced proceedings against the managers and Foresters (who by this time employed the managers)
Employment Law – The Decision
The court on appeal held:
- there could be “no doubt that the board of Foresters was actually aware, had actual knowledge, of the taking and using in breach of duty of confidential information”
- the managers, “with the full knowledge of Foresters, dishonestly breached their duty by, amongst other things utilising confidential information to prepare a business plan for the consideration of the board of Foresters”
- the Board of Foresters actively used the business plan in its decision-making process and, subsequently, to monitor the performance of the joint venture
- the business plan disclosed “detailed information, some of which expressly and plainly came from Lifeplan’s records… No honest and reasonable person, not shutting his or her eyes to the obvious, could conclude other than that the document was based on Lifeplan’s confidential information brought by current employees of Lifeplan”
Employment Law – The Sting
Foresters’ knowledge and even participation in the manager’s breaches (contrary to the manager’s statutory and fiduciary duties under the Corporations Act), rendered it accessorily liable for the breaches pursuant to section 79 of that legislation. [...]
